The Importance of Organizational Design


An organization can be a single entity, an association or a combination of both. Organizational design is the process of structuring an organization to meet its objectives. There are numerous facets to the process including designing and implementing a strategy, determining the scope of the organization, and defining the organizational structure. Choosing the right organizational design is crucial for a business’ long-term survival.

While there are many considerations to keep in mind, a few stand out. The most important is defining the size and scope of the organization. Having a clear definition of the scope helps ensure that all the pieces are in place. This is important for a number of reasons, including the ability to provide efficient and effective resource allocation. It also allows organizations to take a holistic approach to their business. A holistic org is particularly useful when considering collaboration.

One of the more important aspects of organization design is the underlying technology used to power the operation. For instance, how the company uses its data and technology to inform decision making. Or, how the org makes use of its own or externally procured resources. If an organization’s internal capabilities are not maximized, it may not be able to compete in the market place. Similarly, how the organization deploys its technological capital to achieve its objectives.

While this is not a complete list, it does serve as a quick reminder of how technology can greatly influence organizational design. Not only does it play a key role in determining the scope and scale of an organization, but it also impacts the way an organization executes its day to day business. Technology is especially useful in the creation of an org chart.

The org chart is the most powerful communication vehicle in an organization. It contains the most relevant information about the company’s operations, while simultaneously carrying a healthy dose of emotional weight. When a company is confronted with a changing environment, the org chart becomes a valuable tool. Using an org chart to coordinate activities and to manage people is a logical and necessary step to ensuring a smooth ride.

While the org chart may be the most important tidbit in the world of organizational design, there is a much larger impact that is not visible to the human eye. To determine the most appropriate org chart, an organization should consider its prevailing technology and culture, the demographics of its workforce, its competitive landscape, and its level of formalization. The resultant org chart should be functional, scalable, and nimble enough to adapt to a changing environment.

Organizational design is a continuous process. As an organization grows, it should consider the need to upgrade its org chart to reflect the needs of its stakeholders. But in doing so, it should avoid reinventing the wheel. Instead, it should use its data to repurpose its configuration to fit the needs of its constituents. With the right organizational design, an organization can leverage its strengths to help it thrive.